Investors Unhurt by Singapore Xenophobic Fringe: Minister

May 30 (Bloomberg) -- Xenophobia in Singapore, confined to
a minority fringe, hasn’t had an impact on foreign investment in
the Asian country, said Law Minister K. Shanmugam.

“People accept that xenophobia is a minority,” Shanmugam,
who is also Foreign Affairs Minister, said in a May 26
interview. Savvy multinational companies “know that these
sentiments are there in every part of the world.”

Companies are adjusting to the city’s curbs on labor from
overseas after voter discontent over increased competition from
foreigners. Prime Minister Lee Hsien Loong this week deferred
S$2 billion ($1.6 billion) of construction projects to ease
demand for foreign workers in the country, where non-citizens
make up about a third of the workforce.

Singapore is taking the “middle path” in balancing the
needs of companies and citizens’ concerns, Shanmugam, 55, said.

“You have to mediate between the two,” he said. “If we
remove the foreigners, there’ll be a different impact on the
economy and the jobless numbers will be higher.”

Foreign chambers of commerce including from the U.S. and
Europe have warned that revisions to foreign labor policies
could hurt the Asian city’s economy, which is forecast to expand
2 percent to 4 percent this year. Singapore’s jobless rate rose
to 2.1 percent in the first quarter from 1.8 percent in the
preceding three months.

Rule of Law

“Companies that require large amounts of labor force will,
of course, redo their calculations,” Shanmugam said. Foreign
investors recognize Singapore’s advantages including
intellectual property protection, rule of law and high-quality
labor and logistics, he said.

The city’s population has jumped by more than 1.2 million
since 2004 to 5.4 million, driven by immigration. Thousands of
Singaporeans protested a proposal to boost the population to 6.9
million by 2030.

The ruling People’s Action Party, as a left-of-center
social democratic group, has to focus on social policies such as
housing and education to address the effects and stresses of
globalization, Shanmugam said.

“A significant portion of the population either feel
stressed because of job security or feel stressed because of
competition from foreigners, without being xenophobic,”
Shanmugam said. “We have to admit that there’re legitimate
stresses.”

A British wealth manager was forced to leave the city in
January after mocking local residents who have to use public
transport and a Philippine independence day celebration for the
Filipino community in Singapore was canceled this week after
protests by Singaporeans.

That was followed by a May 28 call by 12 civil society
groups for a rejection of racism and xenophobia which they said
had surged recently in Singapore.